Liberty Mutual chairman Edmund F. “Ted’’ Kelly, under fire for receiving nearly $50 million a year from the Boston insurance giant, said Friday that an “accounting issue’’ made his compensation appear larger than it is.

Kelly, who retired as chief executive last June after 13 years, but still serves as chairman, estimated his annual compensation package between 2008 and 2010 was closer to $13 million to $15 million, but was inflated by performance incentives, collected over the years and only recently cashed in.

“It’s an accounting issue,’’ Kelly, 66, told the Globe, shortly before he spoke to students at MIT about growing up in Ireland and his business career in the United States. “It’s as if I got stock options over the years. If the company does well, the stock options do well.’’

Kelly’s defense was echoed by chief executive David Long, who said in an interview with the Globe Friday that the compensation numbers were misleading because they included tens of millions of dollars in performance incentives, called phantom stock and options, that Kelly accumulated over nearly two decades with the firm. Long added that Liberty’s board tries to set executive pay in line with what similar companies offer.

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“I am not going to apologize’’ for Kelly’s pay, Long said. “I think Ted Kelly built a hell of a company, and I was pleased to work with him and I don’t think he has anything to apologize for either. I think a lot of people who worked for him would say thank you to him.’’

Reports of Kelly’s recent pay, however, have angered some policyholders. The company has received about 250 complaints, Long said. Liberty Mutual is mutually owned by its policyholders, so any surplus profits are supposed to go back to customers as dividends or be reinvested in the company.

Although Liberty Mutual has no stock to be traded, the company created a phantom stock program designed to mirror the stock incentives used to reward executives by publicly traded companies. Stock options give executives the right to purchase stock at a set price in the future: If the stock appreciates, the executives make money; if it falls below the set price, the options become essentially worthless.

Liberty Mutual created a similar program to tie some of its executives’ earnings to increases in the company’s value. The value of its phantom stock and stock options skyrocketed over the years because of the company’s rapid growth and improving finances, Liberty Mutual executives said.

Kelly said the company was near bankruptcy when he first joined the company in 1992 as president. It is now a solidly profitable Fortune 100 company with about $35 billion in annual sales. That pushed the value of the phantom stock from less than $18 in 1993 to nearly $100 last year.

Kelly earns about $400,000 a year as chairman, Long said.

The controversy over Kelly’s pay erupted earlier this month after the Globe reported that Kelly earned nearly $50 million a year from 2008 to 2010, which would have made Kelly one of the highest-paid top executives in the country - earning more than the leaders of corporate icons like Bank of America Corp., IBM, and Walmart Stores. Kelly later said he received a similar amount last year.

The issue also comes at a time of heightened concern about executive pay packages. Two weeks ago in a nonbinding vote, shareholders of Citigroup Inc. rejected the company’s decision to boost chief executive Vikram Pandit’s pay to $14.9 million last year.

Long said Liberty Mutual will try to avoid questions about its executive compensation by publicly disclosing top executives’ annual pay packages, starting early next year, in a format similar to what the Securities and Exchange Commission requires for public companies. That will make it easier for people to compare the pay to that of other companies.

As a mutual company, Liberty Mutual only has to report basic pay information to the state insurance commissioner.

“Unfortunately, in today’s environment, I think people think you’re not doing something above board if you don’t [disclose it],’’ Long said. “I don’t want people to assume the worst with us.’’

Long also defended the company’s fleet of five corporate jets, which he said are used to ferry customers and executives to meetings and corporate events, including a company-sponsored golf tournament in Georgia. Next month, the company plans to fly board members and spouses to China for meetings.

“We’re a pretty big company, so we do business in a lot of places,’’ Long said.

The only person allowed to use the jet for personal use is the CEO, which is necessary for security reasons, Long said. “We make sure that the planes are fully utilized and used above board,’’ he said.

Liberty Mutual spokesman John Cusolito said the company also provides the CEO and board members with extra money to cover income taxes they might face related to the trips.

Long also dismissed complaints by local government watchdog groups about the $46.5 million in state and local tax breaks the company received to help build a $300 million office tower in Boston near its headquarters. In return, the company promised to add 600 jobs, plus another 500 construction jobs. The project is halfway through construction and Long expects to add the jobs even faster than pledged.

Liberty Mutual employs 4,700 in Massachusetts, including 2,900 in Boston.

“We view this as a commitment,’’ Long said. “If the building isn’t a symbol of us being committed to the city of Boston and the state for the foreseeable future, I am not sure what is.’’

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